Interesting Article on Tucker Rival

[Tuckerfan1053]

The October issue of Collectible Automobile has a large, well-written, and nicely illustrated article on Gary Davis and the three wheel car that bears his name. For those of you who've not heard of the Davis, it was another car company that was started at the end of WW II, with hopes of capturing a share of the pent up demand for a new automobile that was surely to explode once the war ended. Like Tucker, Davis became the subject of a Federal investigation, with the company collapsing soon after. Davis, however, was found guilty of fraud and served five years in prison. The article's author comes down squarely on the side of Davis being a con man. In reading the article, however, I don't think that belief is entirely correct. Davis strikes me less as a con man, and more as someone who just "couldn't be bothered" with the details of running the business, so it floundered. He seemed to believe that if he just declared that he was going to build a car, and the rest would take care of itself.

[Larry Clark]

The fraud charges against Davis were quite similar to those Preston Tucker faced in the federal criminal trial in Chicago. I believe the prosecutor, Otto Kerner, made a mistake in co-indicting so many other defendants and then putting on such a complicated case before a jury. However, what truly won the trial for Tucker was that Bill Kirby, his primary lawyer, and the lawyers for the other defendants, rested after the prosecutor's case (did not offer any defense witnesses). This caught Kerner totally by surprise.

Kerner had expected Preston Tucker to testify (unlike in the movie, he did not) to be able to "put the nails in the coffin" from Tucker's own testimony. Kerner expected to be able to demonstrate to the jury that Preston Tucker acted as if his money and the company's money were essentially the same. Had Tucker testified, Kerner would have been able to question him about a number of potential violations of the law from Abe Karsten to the purchase of a boat to the purchase of a plane to Oscar Beasley being on a "consultant's contract" as a reward for the plant to stated production dates never met, etc. that arguably involved at least some level violations of the law, even if just technical. Kerner never got the chance (and years later it was Kerner who did hard time in prison).

As to Davis, I have only lightly researched him (not read the trial transcripts, if they yet exist, as I have for Preston Tucker). However, I too have felt he tried to build his car. Contrary to Otto Kerner, I have no doubts that Preston Tucker was trying to build "his" car.

Larry

[Tuckerfan1053]

Larry, my understanding is that there are some significant differences between the two situations (I've not read the trial transcripts, only Egan's and Peterson's books on Tucker and a couple of articles on Davis, so I might be wrong in this.). Feel free to correct me if I'm wrong, but Tucker was under the microscope from the moment he announced he was going to build a car, whereas Davis seems to have had no problems up until people started not getting paid and cars weren't delivered. According to one automotive expert (he restored a prize winning car for Pebble Beach, so he knows a few things) that I spoke to, what put Tucker in the government's sights was the failed "Pea Shooter" aircraft he was supposed to be building during the war. Apparently, some folks thought that Tucker had just pocketed the money and saw his automotive endeavours as a way to get back at him.

[TuckerCar]

At least they didn't make fun of light blue Tuckers on Mr Bean!

[Larry Clark]

Yes, I agree with you that there is the big difference in that the SEC oversight of Preston Tucker began almost immediately while Gary Davis’ problems came later, as you describe. I should have been clearer in saying that they were similar to the extent that both were trying to do too much with too little money at a time when governmental regulators were just coming of age as protectors of consumers.

For Tucker, it was also the time when the definition of a security was expanding to permit broader securities oversight (ordinarily one thinks of stock when thinking of securities but the SEC found that Tucker’s sale of dealerships was the sale of securities since the ultimate production and sale of the car was seen as such a long shot outside the control of dealers). For politicians looking for a “learning lesson” case that might lead to votes on election day, persons like Preston Tucker and Gary Davis were convenient to paint as fraud purveyors.

I also agree with you that Tucker’s failed “peashooter” contract caused the government to have concerns about him from the get-go (the Mark Dees book, The Miller Dynasty, has a discussion about this failed attempt by Preston and Harry Miller- info on the out of print book at http://www.milleroffy.com/Racing%20History.htm).

However, aside from this, as the war was coming to an end Preston Tucker supposedly had a meeting of potential deep pocket investors where he said that if they investeted big dollars they could make even big return money even if the then proposed new company never sold a single car. I have not been able to verify the meeting or, if it happened, when or who might have been present. However, the SEC review of Preston Tucker claimed this was so- the SEC was supposedly tipped off by someone who at the meeting who thought Tucker was a big fraud. Could it also have been someone with significant then Big 3 stock?

Larry

[Tuckerfan1053]

Larry, is there a detailed SEC report on Tucker available? The only one I've seen merely says that Tucker's prospectus contained "falsehoods" with no mention of what those were. The other possibility, in regards to the meeting, is if it's the one that Pearson talked about in his book is that someone got mad at Tucker because he wasn't willing to give up full control of the company to someone else and decided to get back at him by siccing the Feds on him.

Oh, I should also mention that components, tooling, etc. for the Davis were sold to the Brits and wre the basis of the Reliant Robin car.

[Larry Clark]

The answer is yes, the infamous SEC Report that the government refused to give Preston Tucker that was the basis for the fraud lawsuit that was also secretly leaked to the Detroit News ultimately surfaced. I have read it. I have copies of portions of it. I found it years ago while doing Tucker research on a faculty research grant. I am drawing a blank where I found it (it was not in its own file). I will post it if I recall (unfortunately, I lost one of my research notebooks in a move and my notes for this were in it). It would be good for the TACA Archives to have a copy (unlike the criminal trial transcript, I recall it being under 100 pages).

Larry

[Tatra Man]

Hello Brian (and Larry),

I have a complete copy of the SEC report sitting here in front of me. It cost me a trip to Chicago and 50 cents a page to get this copy. But it is full of interesting information.

The date of the SEC report is December 20, 1948. However, the SEC investigation began in the fall of 1946 when Tucker began selling distributorships for his automobile (which, incidentally, had not been designed yet).

As to the "falsehoods", it isn't difficult to find outlandish statements by Tucker without having a copy of the SEC report. Tucker's promotional material often insinuated he had a completely running, tested car when all he had was a scale model. And he claimed the Tucker auto would have all kinds of features - almost none of which appeared on the "production" Tuckers.

As far as the SEC report is specifically concerned, the information you seek can be found in chapters 4 and 5.

Chapter four is entitled, "False and Misleading Statements and Representations". It first discusses Tucker's claims as to "the merits of the car" - in other words, all the things the car was supposed to have but never did. It then discusses the published statements that the Tucker auto was "completely proved in 15 years of rigid tests". Numerous articles appeared in early 1947 to this effect, yet Tucker did not even have a running prototype at this time. The last section of chapter four discusses the status of production (or lack thereof).

Chapter five involves Tucker himself. It is entitled, "Creaton of Unmerited Prestige for Preston Tucker as an Engineer and Designer through Presentation to Him of Questionable and Spurious Awards and Gifts for Supposed Engineering and Scientific Accomplishments; Exploitation of Same in the Sale of Tucker Corporation Franchises and Stock". They give some rather compelling documentation to this effect. But it's too much to delve into here.

Hope this helps.

Hampton

[Tuckerfan1053]

Thanks. That's interesting. Some of what you describe, I think, the company could have made a reasonable argument that the SEC was wrong in it's accusations, but that's the kind of word weaseling that lawyers make the big money for.

[Tatra Man]

By the way, my posting is supposed to read "Creation of Unmerited Prestige..." rather than "Creaton of Unmerited...".

And I forgot to mention that the report is 561 pages long. It takes a lot of information to compile a report that large.

Incidentally, Tucker was given opportunity by the SEC to respond and resolved the misleading statements he made. Some of his explainations were satisfactory, but much of it was impossible to discount. No "word weasling" was needed by lawyers - it came directly from Preston Tucker's own mouth.

[hotrodthom]

I know I'm chiming in late but after doing some research I came upon your thread. I wrote the article in CA on the Davis, and I was really trying to unbiasly present the info that I dug up--some of it never before seen. It was up to the reader to come up with their own conclusion. I never intended to "steer" the conclusion. My opinion is that Davis was in over his head and once the train left the station it was driverless and just ran until it crashed. When you look at the car and the engineering and the amount of effort put out to produce those few cars that Davis actually built, I don't believe he was conning anyone. BUT, he did take $25,000 to purchase a house in Benedict Canyon which is a very expensive area, and a number of employees testified that they heard him say bad things about investors and dealers. He had been living a meager life for a few years and I think that he might have seen this as a bit of payment for having gotten the company up and running and fairly far along, but it was wrong to take the dough. Anyway, I hope it was entertaining and that you got something out of it. If interested in other info on the Davis check out www.suarezweb.com/davis
Thom Taylor

[Tuckerfan1053]

My apologies for misinterpreting your article. I did find it to be a rather fascinating read and it was certainly more informative than the Consumer Reports piece I read on Davis many years ago.